Is government drinking too much of its own Kool-Aid?

Recent news items:

• Geithner says we need to phase out government support for Fannie and Freddie.  In case you didn't know, the government is just about the only entity loaning housing money at present.  Of course, the government doesn't have any money of its own to lend.  It has to either print it up from thin air or borrow it from someone else.  As long as interest rates are low and inflation is muted, government can fund low interest rate home loans.  When rates rise and inflation stirs the people up then the government has to stop that backdoor bailout for the banks.  The fact that Geithner is starting to talk about pulling support might be a signal that government thinks we are out of the weeds and thus it's time to pull back some of the stimulants.  Either that or perhaps China's recent interest rate hikes threaten to strengthen their currency and send some of our inflation back home.  Either way, the housing market is still headed down and cutting back on Fannie and Freddie funding for home purchases is only going to make that worse.  Not that this is a bad thing but rather that it can't be good for bank's balance sheets leading and it could lead to a so called double dip.  If so then Geithner might have to back track on his desire to stop subsidizing the housing market.  If that happens then people might start to figure out that we can never get off the stimulants without causing a crash anymore than a drug addict can stop the drugs without withdrawal pains.
•  In potentially related news PIMCO, the world's largest bond fund and a financial entity that recently bragged that it had developed its own Ponzi escape strategy, recently cut its holdings of US government debt to the lowest level in two years. Coincidence?  Maybe.  But PIMCO's Bill Gross pulled no punches in his bragging statement in the above link.  He said, "Check writing in the trillions is not a bondholder’s friend; it is in fact inflationary, and, if truth be told, somewhat of a Ponzi scheme. Public debt, actually, has always had a Ponzi-like characteristic."  Gross went on to say that PIMCO was basically going to stay in the game while the free money was being given away courtesy of the government and the federal reserve but that PIMCO had a bail out plan.  That implies they had some triggers in place which, if tripped, would send PIMCO skating for the side door leaving the rest of us turkeys holding an empty bag.  I have to praise Bill Gross for his honesty while at the same time I despise his blatant gaming of the system.  Lots of people who don't know how money works are going to get left holding an empty bag for retirement because Bill Gross is going to skate out with their money just like those early to exit Madoff's scam got out whole.  These greasy money elite always make my skin crawl when I see the stuff they get away with at the expense of the rest of society.